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Residential property in rural commuter towns have witnessed "a transformation of activity" according to upmarket estate agent Knight Frank, as the weakened pound and low interest rates help attract foreign and domestic buyers after a year of spiralling values.

The Knight Frank country house department - which deals with properties worth over £2m (€2.3m) - today said that January viewings had risen 80% against a year ago. Rupert Sweeting, head of Knight Frank’s country department, said: “Compared with the run-up to Christmas, there has been a transformation in activity since the start of the New Year.

"We are seeing international buyers take advantage of the favourable euro/sterling exchange that, together with the reduction in house prices, presents those buyers with opportunities to purchase a property 40% cheaper than last year."

The agent said that with interest rates now at historic lows - the UK bench mark now set at 1% - borrowing had become less expensive and saving less attractive.

The rise in activity has been led by financial services professionals, according to the agent, with rural towns in commutable distance to London proving the most popular.

Andrew Shirley, head of rural property research, added: "Interestingly, we have seen the biggest increase in activity in the south of England. This suggests that those areas favoured by City workers, like the Home Counties, which were hit hardest by the banking collapse last year, are starting to recover first."

At the annual Knight Frank London breakfast the Dorchester yesterday, the firm's commercial division tipped falls in London super-prime and prime property values to bottom out in the third quarter of this year, with prices rising from 2010 onwards.

Last year, Knight Frank's London office predicted that super-prime and prime residential property in London would increase between 3% and 5% in 2008. In fact, the market fell by more than 20%, with prime property falling 3.7% in value in January of this year alone.